CSX Lowers 2015 Earnings Outlook

(RTTNews) - Railroad operator CSX Corp. (CSX) on Wednesday lowered its earnings forecast for fiscal 2015, noting that coal headwinds have increased for the remainder of the year.

In its first-quarter earnings conference call, the Jacksonville, Florida-based company said it now expects earnings per share for fiscal 2015 to increase in the mid to high single digits, while earnings per share for the second quarter is projected to be flat to slightly higher.

CSX continues to expect its domestic coal volume for the full year to decline at least 5 percent, reflecting the stronger U.S dollar, relatively mild winter weather and lower natural gas prices.

The company also noted that the outlook for 29 percent of its second-quarter volume, including domestic and export coal, forest products, metals, and phosphate and fertilizer, is unfavorable.

In early March, CSX had forecast double-digit earnings growth for fiscal 2015, but noted that achieving the goal would be more challenging with the expected decline in coal movements.

On average, analysts polled by Thomson Reuters expect the company to earn $0.58 per share for the second quarter and $2.11 per share for fiscal 2015. Analysts' estimates typically exclude special items.

On Tuesday, CSX reported an 11 percent increase in profit for the first quarter, as revenues improved and operating costs dropped. The company also boosted its quarterly dividend by 13 percent and announced a new $2 billion share buyback plan.

The company's net income for the first quarter rose to $442 million or $0.45 per share from $398 million or $0.40 per share last year. Revenues for the quarter rose to $3.03 billion from $3.01 billion a year earlier.

However, total volumes for the first quarter increased only 1 percent to 1.64 million units, while revenue per unit dropped slightly to $1,851 from $1,859 last year.

CSX closed Wednesday's trading at $32.86, down $0.35 or 1.05 percent on a volume of 14.16 million shares. In after-hours, the stock further declined $0.07 or 0.21 percent to $32.79.